Caravan tax to cost 7,000 jobs: East Yorkshire MPs to step up fight
MINISTERS have been warned a decision to impose VAT on static caravans could lead to more than 7,000 job losses.
New figures estimate 4,340 jobs could be cut at holiday parks across the country, on top of the 3,000 jobs at risk at caravan manufacturers and in the supply chain.
East Yorkshire, where 95 per cent of caravan manufacturers are based, is expected to bear the brunt of the job cuts.
MPs fighting to stop the tax being imposed now plan to use the new figures to urge the Government to reverse its decision.
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Beverley and Holderness MP Graham Stuart will use a Commons debate on Thursday to warn ministers of the potentially devastating impact on the economy.
Mr Stuart said: "These figures bear out what everyone in East Yorkshire has been saying.
"The VAT increase will be an own goal and not a boost to the nation's finances. The new figures do help our argument that this tax should not go ahead.
"It is another reason to believe the impact of this will be worse than the Treasury has expected."
The National Caravan Council, which released the figures, said it previously underestimated the impact of the tax on the holiday park industry.
The council said it now believes 4,340 jobs could be lost at holiday parks across the country.
Further job cuts could include 1,446 at caravan manufacturers, 1,500 at suppliers and 80 at distributors.
David Richie, whose firm Teamwork Professionals acts as the secretariat for the Hull and East Yorkshire Caravan Manufacturers' Association, said the tax will have a huge impact on the region.
"It will have a severe effect in this area, which is the biggest manufacturing centre for holiday caravans in the UK," he said.
"The tax will have such an effect on unemployment that it will not increase Government revenue because of the loss in income tax and increase in unemployment benefits.
"It seems ludicrous to introduce a measure that will not bring in any money but that will have an awful impact on a lot of people from a part of the country which is not that prosperous."
The debate will come just a week after MPs forced through a vote supporting the tax, despite a promise to extend the consultation period by two weeks.
The consultation on the change will now end on Friday, May 18.
Mr Stuart said: "These latest figures, which suggest a big hit on employment, are exactly why pressing the Government for an extension to the consultation was so important.
"The industry needed time to analyse the information and come up with accurate numbers, which show an even bigger effect on employment.
"Holiday parks employ a lot of young people and there is already a record level of youth unemployment.
"The people who may lose their jobs in this region, at both holiday parks and in manufacturing, will find it harder to get work because of the existing high unemployment."
According to the Government's estimates, the introduction of VAT will lead to a 15 per cent retail price hike and could reduce demand by 30 per cent.
But Hull West and Hessle MP Alan Johnson claims the real figure will be more like 75 or 80 per cent.
He said Atlas Leisure Homes, which cut 250 jobs during the recession in 2008, and Meadley International Transport will both be badly affected by the tax change.
He said: "Atlas has fought its way back and now employs 120 people in an area that has been badly hit by unemployment. Companies in the supply chain have had similar experiences Meadley International Transport is run by a father, his son and his daughter.
"He put in the whole of his pension and all his assets to get Meadley through the global downturn, and it, too, is now getting its head back above water.
"This measure will destroy Atlas and Meadley. It will destroy small businesses across the country.
"It will destroy an industry that is almost the last purely British success story in the manufacturing sector."
More than 1,500 people have signed an e-petition calling on the Government to scrap the tax, which was announced by Chancellor George Osborne in last month's Budget.
Last week, Ron Austin, joint managing director at Carnaby Caravans in Bridlington, said he could be forced to lose 33 members of staff if there was a 30 per cent drop in demand.